Case study #3

Assignment Description:
Class time is often dedicated to analyzing case studies in a group setting. Students should come to class having already individually analyzed the case and its associated rubric(s). Students should use class time to collaborate with other classmates and gather further peer insight in a group setting. To be clear, collaboration does not mean “copying”, but rather sharing insight, assisting, discussing, equitably working together, and more. Remember that a strong emphasis in the grading process is placed on your portrayal of your critical thinking in the submission of the case study report. It is important to arrive at the proper calculations, though it is very possible that classmates may arrive at different “correct” calculations dependent upon individual mathematical or contextual assumptions/choices. Be sure to state all assumptions made and cite every source used. Students must individually submit their case study reports. The case study reports should consist of the following components:
• Responses to the posed questions within the case.
• A summary of the microeconomic issues within the case and how firms, individuals, etc. would be affected by the situation.
• An overall conclusion of your findings comprehensively detailing proposed solutions to the above microeconomic issues.
• All references (be sure to cite in-text also).

 If you find this symbol, a response is needed.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

EC 261 Microeconomics Case Study 3- Church and State
The state of Utah is home to a variety of big business opportunities. Tourism, education, tech, public administration, and construction are some of the largest industries you will find. Utah is also widely known for many of its residents being members of The Church of Jesus Christ of Latter-day Saints (https://www.churchofjesuschrist.org/?lang=eng). A variety of “off-shoots” of The Church of Jesus Christ of Latter-day Saints (LDS) have also sprung up and have contrasting doctrine and practices, yet the LDS church is headquartered in Salt Lake City, UT. As a worldwide organization, the LDS church has a variety of functions and purposes. One of its primary foci is to spread the gospel of Jesus Christ throughout the world.
 What are the variety of ways that the church accomplishes this task?
 Provide some context of the typical demographics of the individuals who are accomplishing the above.
In addition, beginning in the 1980’s, the LDS church began building and operating temples at a very rapid pace. A temple in the LDS church is a specific building where certain and sacred religious services are performed. Though the hours for each temple varies, we will assume that typically any given temple is open 50 weeks per year, 5 days per week, and 10 hours per day. The three main services performed are as follows (for purposes of this case study, you need not worry about the religious doctrine behind the following ceremonies, just know about the capacity levels associated with them):
(1) baptisms by-proxy for those who have passed away (this is a ceremony where a baptism occurs, of which the individual being baptized is full submersed in the water). On average, 95 baptisms by-proxy can be conducted per hour (only one person can be baptized at a time)
(2) endowments by-proxy for those who have passed away (this is a ceremony that occurs after the baptism and is similar to becoming a member of the clergy in most mainstream Christian religions, though many congregational members in the LDS church are “endowed” with the same “level of priesthood” as the “pastor” of the congregation). On average, 50 endowments by-proxy can be conducted in 2 hour period (50 people can be endowed at a time, but it is a 2 hour process)
(3) sealings by-proxy for those who have passed away (this is ceremony similar to a marriage ceremony that occurs after the endowment). On average, 40 sealings-by proxy can be conducted per hour (2 separate marriage rooms are located in the temple and therefore 20 sealings by-proxy per room)

 Calculate the average capacity per above service category, in “headcount of patrons” (members coming to do service as described above with baptisms, endowments, and selaings in the temple) on a yearly basis.
 Create production possibilities frontier curves comparing each service category to the other
 Create a supply schedule for each service category.
The above 3 services are only conducted within a temple, and is not done, for example, in a traditional church building where congregational members would gather on a typical Sunday. Members are encouraged to frequent the temple as often as possible, so they can be in place that is considered to be more holy and sacred more and more often. The process of determining the proposed location of a temple is typically the following:
(1) the general authorities of the church have a variety of sites surveyed,
(2) a feasibility study is conducted,
(3) economic data is gathered and projected as to how many individuals would frequent the temple on a daily, weekly, monthly, and yearly basis,
(4) a temple announcement occurs in a general assembly of the church stating the chosen site(s),
(5) construction on the temple begins shortly thereafter,
(6) the temple is “dedicated” through a religious ceremony performed by the general authorities of the church,
(7) the temple then becomes operational for which individuals who have a current temple recommend (basically a “membership card” stating that you are spiritually worth enough to enter the building and perform the services in the temple) are able to enter into the building.
Proximity to a temple is typically considered highly desirable to many members of the LDS church, because regular temple attendance/worship is one of the fundamental goals of membership in the church. Therefore, proximity of the temple to where someone lives can make worshiping much easier or convenient.
 How many LDS temples are currently operational today?
 Of those how many are located within the borders of the United States?
 Of those how many are located within the borders of Utah?
 How many individuals (headcount and individuals) will typically frequent a temple in a given year?
 Create a supply and demand curve comparing the supply of yearly services to the demand of willingness to serve.
Assume the following information regarding LDS temples:
1) approximately 10% of the current LDS church members are temple recommend holders
o approximately 70% of temple recommend holders are adults (ages 18+) and 30% are youth (ages 11-17)
2) 65% of the above 10% will frequent the temple 4x or less per year.
o 85% of the 65% are people who live outside of the states of Utah, Idaho, and Arizona (international and domestic numbers included)
3) 20% of the above 10% will frequent the temple between 4x and 12x per year.
o 52% of the 20% are people who live within the states of Utah, Idaho, and Arizona (international and domestic numbers included)
4) 12% of the above 10% will frequent the temple between 13x and 24x per year.
o 75% of the 12% are people who live within the states of Utah, Idaho, and Arizona (international and domestic numbers included)
5) 3% of the above 10% will frequent the temple 24x+ per year
o 95% of the 3% are “workers” in the temple of whom must be there on a daily basis
o 3% of the 3% are people who live within the states of Utah, Idaho, and Arizona (international and domestic numbers included)
6) people are “assigned” to certain temples based upon proximity to where they reside
Consider real estate supply in Utah.
 What is the average cost for residential real estate within 2 hours of a given temple within 2 hours drive of Salt Lake City, UT?
 Within 30 minutes of a temple?
 Within 5 minutes of a temple?
Consider the historical nature of when an announcement is made for a new temple. If you were a general contractor specializing in constructing residential homes in the Salt Lake City area, would you pay attention to these temple announcements and the locations of the new temples?
 What are the trends around residential real estate immediately following an announcement of a temple?
 How do those trends relate to elasticity of demand?
 If you were that general contractor, what business decisions you would need to consider if a temple was announced within your general area?
 Select a given temple within a 2 hour drive of Salt Lake City, UT, but the temple of your choosing can not be located in Salt Lake City, UT or Provo, UT.
 Calculate the real estate’s (within 30 minute drive of the temple of your choosing) elasticity of demand comparative to a proximity of a temple. Within 30 minutes of a temple.
 Calculate the real estate’s (within 30 minute drive of the temple of your choosing) elasticity of demand comparative to a proximity of a temple. Within 30 minutes of a temple.
 Describe how elastic or inelastic residential real estate is in the Salt Lake City, UT area.
 Predict the future of residential real estate in the Salt Lake City, UT area.

 A summary of the microeconomic issues within the case and how firms, individuals, etc. would be affected by the situation.

 An overall conclusion of your findings comprehensively detailing proposed solutions to the above microeconomic issues.